The past year has been a rollercoaster for small businesses. The first lockdown through April last year threw many small businesses into a tailspin of panic, but thankfully most quickly learned to adapt to their new operating environment.
Entrepreneurship under adversity is something that has long intrigued me. My research has shown that New Zealand, and in particular its regions, have been a hive of entrepreneurial activity since Covid. The big indicator has been that business births have soared. Driving this have been budding entrepreneurs finding opportunities amid all the change, including those who lost their job in struggling industries, as well as people seeking out a new lifestyle.
Over the past year, I have also been closely following data from Xero on the state of play for existing small businesses. Xero’s data has proved to be an interesting barometer of small business fortunes – and is not based on a small sample as your typical business survey is, rather it is drawn from Xero’s 450,000 New Zealand subscribers.
And what has the data told me?
Well, small business revenue is up as we all know. In fact, Xero calculates it was up 6%pa to 12%pa across each month in the June 2021 quarter after adjusting for last year’s initial lockdown.
But that’s not what intrigues me most about the data.
Of even more interest to me is that businesses are playing fairer with each other. Xero’s time to be paid indicator shows that the average small business now waits 23.6 days for an invoice to be paid, down from 26.7 days in June a year ago.
This trend of more rapid payment of invoices is something I have experienced myself as a small business owner and is very much appreciated. If you have done the work and are awaiting payment, it can get a bit tiring when you realise someone else is dragging the chain. A new wave of corporate responsibility seems to be taking hold to play fair with the small guy. Most of my invoices now end up being paid long before their due date. Not a bad result, all things considered, and long may it continue.